The Environment Agency will re-launch the bidding process for a lucrative flood defence contract after fears that the original tender suffered technical flaws similar to those that caused the West Coast Mainline fiasco.

The rail-franchise failure, which saw Sir Richard Branson initiate legal action after the Government awarded the £5 billion contract to FirstGroup, before that decision was overturned, sparked a review of wider government procurement.

This is understood to have led to the flood defence process being halted, despite a widely held belief that Atkins would be the favourite to land the work under either format.

Coincidentally, the engineer was a technical adviser on the process for the London to Glasgow West Coast, a franchise that will now be run by Virgin until at least the end of 2014.

Although the delay to the flood defence tender will not cost the tens of millions to the public purse that was one of the major features of the rail fiasco, it is thought that about 15 bidders have each spent about £1 million on the process.

The scheme will be re-launched next Tuesday, which will be a relief to households which fear a repeat of the floods that wrecked property and left the insurance industry with a £1.2 billion bill last year.

An Environment Agency spokesman said: “We have slightly delayed this procurement process to give complete transparency to bidders and will be re-issuing the invitation to tender on February 26. The new framework will be awarded in June 2013. We do not believe delivery of flood defence projects will be held up by the re-tendering.”